The home secretary, Charles Clarke, last night hinted that he would like to move away from the time-honoured "adversarial system" of British justice in terrorist cases as part of his wider review of the counter-terrorism laws.

"I am not an absolute fan of adversarial justice. I am prepared in due course to look at some other systems that could be appropriate in this area," he told the Commons home affairs select committee last night.

Mr Clarke acknowledged that the implications of such a change in the British legal system would be enormous and would need very wide consultation. Although he did not specify the alternative it must be assumed he would like to see a move to the French inquisitorial system, in which the judge also takes on the role of prosecutor.

Such drastic reform would be bound to provoke opposition from "principled lawyers", but he said that might be a contradiction in terms and that he was prepared to look at such changes "in the round".

Mr Clarke's thoughts echo proposals floated a year ago by his predecessor, David Blunkett, while on a trip to India when he proposed a new system of special terrorist courts.

An inquisitorial system would not necessarily mean doing away with a jury or defence and prosecution counsel but it would give the judges a far greater role in calling witnesses and evidence. Mr Clarke indicated he might even be willing to disclose phonetap evidence in such inquisitorial trials.

He confirmed last night that he is still considering new terrorist offences such as "acts preparatory to terrorist offences", to be introduced after the general election.

The home secretary staunchly defended his new "house arrest" proposals, saying decisions about national security had to be taken by elected politicians and could not be delegated to the judges. Mr Clarke said he believed there was "genuine goodwill" among all three of the main parties to reach some kind of consensus over his proposals in the wake of the law lords' ruling declaring the Belmarsh detentions to be an abuse of human rights conventions.

A Downing Street "summit" on the terror laws, attended by Tony Blair, Michael Howard and Charles Kennedy, will take place on February 18.

Mr Clarke said he was willing to consider suggestions such as that the director of public prosecutions should have a role in advising the home secretary when he issues a "control order" against a suspected terrorist based on the security services' assessment.

He did not believe those who would be put under house arrest through powers available under a control order would number more than "a handful" and fewer than 100 would be covered by lesser control order powers such as a ban from accessing the internet or using mobile phones, or being placed under surveillance.

The home secretary also clarified who would be subject to the house arrest powers, saying only those who were involved in international terrorism would be subject to this form of detention. Any derogation from the European convention on human rights would only be in connection with the Al-Qaeda network.

In extreme cases animal rights activists and other forms of domestic terrorism might be subject to lower level control orders but they would not face house arrest. Demonstrations and political lobbying would not be affected.

Mr Clarke conceded that intelligence failures over weapons of mass destruction in Iraq had led to public scepticism about the security services' assessment of the scale of the terrorist threat facing Britain.

The Home Office was considering publishing "fictionalised accounts" of a particular terrorist group's plans to operate in Britain. He was also considering putting into the public domain more details of the exact nature of the terrorist threat. "Those who say there is no terrorist threat are living in a dream world."